Monti Says Germany Should Show More Support For EMU Peers: FT
PARIS (MNI) – Germany and other creditor nations should put more of
their financial muscle behind the fiscal reform efforts of their
struggling fellow Eurozone members to help them lower borrowing costs,
Italy’s Prime Minister Mario Monti said in an interview with the
Financial Times published on the newspaper’s website Monday evening.
If the Eurozone’s core nations fail to do that, there will be a
“powerful backlash” among the voters of the region’s weaker peripheral
states, Monti warned.
The Italian leader said he would try to show Berlin that it is in
“its own enlightened self-interest” to use its strong fiscal standing to
help lower the borrowing costs for Italy and other highly indebted
nations. He noted that the euro had brought “huge benefits – and maybe
(to) Germany even more than others,” the FT reported.
Monti credited Germany with exporting a “culture of stability” to
the rest of the Eurozone. He said Germany’s partners had learned the
lesson well and should now be rewarded. “The more these (high debt)
countries show (they) have concretely understood the imperatives of
discipline, the more Germany should feel relaxed,” he said.
He added: “If this strong movement towards discipline and stability
is not recognised as taking place, and a certain approach to financial
aspects does not gradually evolve, then there will be a powerful
backlash in the countries which are being submitted to a huge effort of
Monti also hinted that he thought the ECB should do more to help
bolster the troubled peripheral economies, and suggested it might decide
to do so once the EU members have followed through with a planned new
treaty bolstering fiscal rules. He danced gingerly around the issue,
however, acknowledging that he had agreed with Merkel and French
President Nicolas Sarkozy not to comment publicly on what the central
bank should do.
“An independent ECB will feel in turn more relaxed once a fiscal
compact is on paper with 27 or 26 signatures,” Monti said. “In its
autonomy, it may or may not decide to ease its monetary policy.”
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